Service Providers May Hold Key To The Future's Product Sales

By TWICE staff -- TWICE, 4/5/1999

Ask most people what "multimedia" and/or "interactive" are all about and you will get a product-based answer: They want to define it in terms of personal computers, audio or video systems, or game systems, etc. But there is another whole segment of opinion out there that says it has little or nothing to do with product or content and is, in fact, based upon delivery systems. In other words, how we get content to people and how they manipulate it once it is in the house is more important than the content or the hardware itself. For the most part, it boils down to one or more of three things: telephone companies, satellite transmission of some type, and/or cable companies.

The current edition of the Verity Multimedia Interactive Tracking Study specifically addresses what adult consumers think about each of these services, and the results are, to say the least, very interesting, not to mention controversial. For example, I doubt that many of you will be surprised to learn that general dissatisfaction with one's cable company translates into less confidence in its ability to provide multimedia/interactive services in the home, at least in relationship to the phone company and/or satellite services. But would you expect that there is any difference when looking at specific attributes? According to the Verity study, just over 50% of the respondents rate a satellite company's ability to provide basic television service as very high in terms of quality of service -- in comparison to just over 33% of the population who feel that way about the phone company and/or the cable company.

And while the gap narrows somewhat when considering "interactive television," the findings are basically the same. However, again not surprising, the picture changes in favor of phone companies when considering just phone services. What is significant, however, is not the obvious, i.e. expecting the phone company to do what they have always done, but rather the fact that as high as 40% believe that a satellite service company would provide high-quality telephone service.
This particular report went even further and asked consumers about their interest in receiving services such as home security, at-home medical information, and educational services via the telephone company, a satellite company and/or a cable company. As with the previous results, the picture is quite similar.

People are most comfortable with what they are used to, but there is hardly a lock on what could become the norm in the future -- presuming that satellite service providers follow through with what is clearly an excellent start into consumers' homes. The great majority of you reading this are primarily, if not exclusively, interested in hardware. But I suggest that you need to broaden your interest to include concerns about delivery systems. As never before, this latest round of research provides convincing evidence that your world could change almost overnight, given some of the services and products that are currently being discussed by companies that have little or nothing to do with the consumer electronics or the personal computer industry as we know it.

William Matthies is the president of the Verity Group and can be reached at (714) 680-9611 ext. 209 and/or America Online Verbill@aol.com.